9911796707
TMI Blog2014 (11) TMI 990X X X X Extracts X X X X X X X X Extracts X X X X ..... Learned advocate Shri P.M. Dave on behalf of the appellants submitted that the whole case is made out on the basis of 52 yellow chits recovered from the appellant's premises. He submits that there are no inculpatory statements admitting the clandestine removal. He also submits that out of 52 yellow chits, figures in 22 chits match with retreatment figures which are recorded in separate register wherein the entries regarding fabrics, which were found to be defective and sent for retreatment has been entered. It is admitted fact that data relating to re-treatment could not be entered into the computer and appellant were maintaining retreatment register manually. Further, he also submits that in some cases RG-1 figures also match with yellow chits. In support of his contention that other than chits, department has no other evidence, he submits that folding charges paid to the contractor match with the figures shown in the RG-1; electricity consumption also matches; all the statements are consistent and there are no inculpatory statements. Dr. Manoj Kumar Rajak, SDR on behalf of Revenue, on the other hand submits that it has been admitted by the folding clerk as well as Vice-President ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommissioner observed in respect of 22 chits that figures entered in the RG-1 register are also found in the reverse of the yellow chits and the figures are different when compared to the figures on the main portion of the yellow chits which clearly show that the entries in RG-1 register were deliberately not meant for the full quantity produced by the appellant. Further, on verification of few chits, it was found that there is some force in the contention of the appellant that the quantity of retreated fabrics has also been included for the purpose of arriving at the quantity not accounted for in the RG-1. For example, for the chit dated 9-6-2002, it is clearly mentioned that total production is 73,586 Metres and it is also written (Excise) 43236.1 Metres. In this case there is no entry regarding retreatment. Thus this chit clearly shows that Commissioner's conclusion that full quantity produced was not entered is correct. On 11-6-2002, the chit shows the quantity retreated as 15184.4 Metres and the total production is 82,129.7 Metres. In the annexure to the show cause notice, 82129.7 Meters has been taken as production and 77414.3 Metres was accounted for in the RG-1 register. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... subsequently. In that case the appellant had submitted that whole case of the department was made on the basis of diary maintained by a labourer and no other evidence was available. In this case the figures entered in the RG-1 tallied with the figures in the yellow chits in a large number of cases and in some cases the reverse of the yellow chits contain quantity entered in the RG-1. In Ashwani Vanaspati Industries Pvt. Ltd. - 1992 (59) E.L.T. 175 (Tri.), the Tribunal observed that alleged clandestine removal of vanaspati was based on the basis of private registers which indicated day to day production and dispatch of unfinished goods and liquid stage goods to cold storage room for solidification and not removal of these goods from the factory and the statements were not incriminating. As already mentioned above here the chits are found to be valid. In TGL Poshak Corporation - 2002 (140) E.L.T. 187 the Tribunal had confirmed the duty demand of Rs. 3,08,284/- on the basis of note books which contained certain details relating to removal but their demand was based on statements submitted to the bank and was set aside. In Shakti Chemical Industries - 1995 (76) E.L.T. 410 (Tri.) it wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t since the department has not proved the clandestine removal duty cannot be demanded on the quantity shown as produced as per yellow chits. It is observed that excise duty is leviable on manufacture and removal or sale of the goods is not necessary for the purpose of levy of excise duty. Therefore, once Revenue establishes that goods have been produced, the burden to show that the same are not produced or duty has been discharged on the same shifts to the assessee. 6. In view of the above, we feel that demand needs to be reworked to arrive at correct amount of duty payable. We uphold the reliance of the department on the yellow chits as regards purchases and also shortage of quantity found during the visit of the officers, and remand the matter to the original adjudicating authority who shall requantify the demand after detailed analysis of the chits with the retreatment register and RG-1 register and also reconsider the penalty on the basis of the duty demand. The Commissioner shall consider the Suitings and Shirtings separately for calculation of duty liability, as far as possible. Appellants shall be given liberty to present their case before the matter is adjudicated afr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellow chits are made for reflecting the production of the fabric and their entry in RG-1 register, they cannot be said to have been maintained in a meticulous manner and are only a procedure adopted by the appellant, the same being not a statutory document. 9. As per the settled law on the issue, clandestine removal is required to be established by production of tangible and positive evidences. As such, the chits in question were required to be corroborated by other evidence indicating clandestine activity on the part of the appellant. As already observed, neither of the statements accepted any clandestine removal. Further, the appellants have strongly contended that the payments made to folding clerk by way of cheques also matches with the RG-1 register entries. The electricity consumption has not been shown to be on the higher side. No buyers of the fabrics have been identified and their statements recorded. My learned brother has discussed the various decisions produced before us by learned advocate and has distinguished the same. However, I find that such distinction is on the basis of minor factual differences. In fact, the demand raised on the basis of notebook, etc., w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation that the appellants might have carefully prepared the payment record so as to tally with the RG-1 entry. Similarly in respect of power consumption, he has observed that if the appellant is regularly clearing the fabric clandestinely; there would be no variation in the power consumption during the particular period. I am of the view that the above observations are in the area of conjectures and surmises and cannot take place of legal evidence required to establish clandestine removal. 13. In view of my foregoing discussion, I hold that the recovery of yellow chits which also include retreatment entries, cannot be made sole basis for upholding the findings of clandestine removal against the appellant. I, accordingly, set aside the demand of duty of Rs. 55,26,426/- and penalty of equal amount imposed upon them. 14. I further note that the demand of duty of Rs. 1,15,454/- stand confirmed against the appellant in respect of the shortage of fabrics detected at the time of visit of the officers. My learned brother Member (Technical) has not separately dealt with the same. 15. As is seen from the impugned order of the Commissioner that there was shortage of 12,334 m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ordingly, the difference of opinion is being reformulated as under :- DIFFERENCE OF OPINION (i) Whether the findings of clandestine removal can be upheld on the sole basis of recovery of 52 yellow chits from the office of the folding clerk and consequent confirmation of demand along with imposition of penalty can be upheld? (ii) Whether the clandestine removal is required to be established beyond doubt by production of positive and sufficient evidence or as to whether 52 yellow chits so recovered, can be held to be sufficient so as to upheld the clandestine removal? (iii) When there is no inculpatory statement of any responsible person admitting clandestine removal, mere failure on the part of the assessee to explain the presence of yellow chits can lead to the inevitable conclusion of clandestine removal? (iv) When the Revenue has not rebutted the assessee's claim of having made payments to the folding clerk through cheques, which co-relate with RG-1 entries, the said factor is required to be considered as relevant or not? (v) When the yellow chits ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nbsp; When the yellow chits maintained by the appellant are not a statutory document and relate to entries in RG-1 register as also in retreatment register, whether the same would constitute sufficient evidence for upholding the charges of clandestine removal against the appellant? (vi) When there is no other corroborative evidence in the shape of statements of buyers, statement of workers and electricity consumption, etc., whether the yellow chits recovered from the folding section can be made the sole basis for upholding the charges of clandestine removal? (vii) Whether in the light of the above and in the absence of any corroborative evidence, in the light of the precedent decisions, it is required to be established the clandestine removal beyond doubt, and the demand of duty and imposition of penalty on the said count is required to be set aside as held by Member (Judicial), or the matter is required to be remanded for requantification of duty as observed by Member (Technical)? 21. Heard both sides on the issue. Ld. DR was granted liberty to file written submissions, which he has done so and the same are taken on record and considered. 22. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat during the course of search, 52 yellow chits were found from the working table of folding clerk. It is his submission that on comparison of the stock on the chits and RG-1 entries, there was difference and the said difference was not properly explained. It is his submission the difference as explained by the appellant was that the quantity mentioned in yellow chits includes retreatment fabrics. It is his submission that only 6 of the total 52 chits bears marking as retreatment on them and remaining 46 chits have no such markings whatsoever. It is his submission that takes an example of the details of chit dated 15-8-2002 as was taken by the Commissioner as well as Hon'ble Member (Technical) to come to a conclusion that there was definitely a difference between RG-1 register and the quantity mentioned in the yellow chits. It is his submission that the claim of the assessee that there is no variation in the average consumption of electricity is of no avail inasmuch as the difference has been worked out by the Revenue between the RG-1 figures and the figures mentioned in the chits which are not disputed and the said chits are authentic. It is his submission that the appellant's cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on is received by the company or any of them in cash or otherwise. In short, the entire set of statements is exculpatory. I also find that there is no dispute as to the recovery of 52 yellow chits indicating therein some figures. The said figures have been explained by Shri Suresh P. Chauhan, Folding Clerk who maintained the chits, as were provisional production figures as informed by the workers in the folding department and also includes retreatment figures which do not get reflected in the statutory record. 30. I find that the adjudicating authority has only relied upon the entries made in these 52 chits and recorded that these entries are not tallying with the entries made in RG-1 register. 31. In my considered view, the figures indicated in the yellow chits, may be provisional figures. This view of mine is based upon the fact that the yellow chits does not indicate any quantity recorded as clearance from the factory premises without accounting for. It is also to be noted that though the Revenue authorities have recorded statements of the individuals, they though it fit not to ask any of these people as to the difference between the figures recorded in the yellow ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncriminating the assessee by stating that, the inputs were not received in the factory nor were they used in the final products manufactured by the assessee; on the other hand, we have an established fact of the payments having been made by cheques in respect of the inputs covered by the invoices which are on record along with the other evidence in the nature of octroi receipts relatable to such goods. The octroi receipts constitute a very important and independent documentary evidence in support of the fact that, the inputs covered by the invoices drawn in the name of the assessee, were, in fact, carried in the tankers and brought within the municipal limits in which the factory of the assessee was situated. Admittedly, no driver of these tankers was examined by the Revenue authorities. The owner of the transport company has stated that, the delivery of the goods was to be taken at Aslali Naka, but from his statement, it cannot be inferred that the goods were not transported further into the municipal limits in the same tankers. The fact that the goods entered the municipal limits from Aslali Naka in the same tankers is amply borne out from the octroi receipts. If the appellant-as ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
